PEL 39 keeps Shell’s Namibia oil play alive

Shell is preparing for another phase of offshore exploration in Namibia as it assesses whether discoveries in the Orange Basin can support commercial development.

The latest stage follows Merlin-1X, the 10th well drilled on petroleum exploration licence 39 (PEL 39), which Shell said delivered the strongest subsurface results on the licence to date.

The well, spudded in April 2026, encountered good reservoir quality, light oil and limited associated gas, providing further information for Shell and its partners, QatarEnergy and the National Petroleum Corporation of Namibia (NAMCOR), as they evaluate the block.

The next phase is expected to involve the Stena DrillMAX, which departed Las Palmas on 6 October and is mobilising to the region to begin operations. The planned exploration and appraisal window runs from 1 November 2026 to 1 February 2027, according to the operational information provided.

Further drilling would allow Shell and its partners to investigate the resource potential of the licence in greater detail. However, the programme does not in itself signal that a commercial development has been approved.

PEL 39 covers about 12,000 square kilometres offshore Namibia. Shell operates the licence and holds a 45% interest, with QatarEnergy holding another 45% and NAMCOR the remaining 10%.

Merlin-1X adds to a multi-year exploration campaign in which Shell has drilled a series of wells to assess the block's geology and petroleum potential. Earlier wells, including Graff-1X, La Rona-1X and Jonker-1X, helped establish the presence of hydrocarbons, but the commercial prospects of the discoveries have remained uncertain.

That uncertainty was underscored in 2025, when Shell recorded a US$400 million impairment related to its Namibian portfolio after earlier discoveries failed to demonstrate sufficient near-term commercial potential. The write-down highlighted the challenges of turning offshore discoveries into economically viable projects.

The latest results have given the company further information to consider, but questions remain about the size and continuity of the resource, reservoir performance and the economics of any potential development.

Shell said in June that further drilling later in 2026 was under consideration as part of a broader exploration and appraisal programme. The mobilisation of the Stena DrillMAX, if confirmed as part of the PEL 39 campaign, would mark a further operational step in that process. The scope and results of the planned work will be important in determining what can be concluded about the licence's commercial prospects.